Honda will invest R$ 1 billion in a new car factory in São Paulo

With the support from Investe SP, the companys new plant will double its annual production capacity in the country to 240,000 units from 2015

Honda Automóveis do Brasil Ltda. (HAB) will build a new car factory in the country in the city of Itirapina, state of São Paulo, located approximately 200 km from the capital and 100 km from the other car factory of the brand, in Sumaré.

With an investment of approximately R$ 1 billion, the new plant will have a production capacity of 120,000 cars per year and will employ approximately 2000 employees. The new plant is expected to start operating in 2015.

Investe São Paulo, an investment promotion agency associated with the Department of Economic Development, Science and Technology has been providing support to Honda since July 2012, helping the company in all its fields of activity: location of the land, industry information, tax, environmental and infrastructure advice.

“Being the fourth largest car market in the world, Brazil is a very important region for the operations of Honda. With the capacity expansion, our goal is to gain competitiveness and offer increasingly attractive products that exceed the expectations of Brazilian consumers,” said the president of Honda South America and Honda Cars of Brazil, Masahiro Takedagawa.

The new plant of Itirapina, which comprises an area of 5.8 million square meters, should produce a compact car in the same category of Honda Fit, given the strong demand for models in this segment.

“For the state of São Paulo, the construction of a second plant of Honda is great news. The announcement of the new facility in Itirapina represents the prospect of technological advance, value added and the generation of thousands of direct and indirect jobs Honda is a giant in the automotive industry that has a strong characteristic of innovation, even from the environmental point of view. The expansion of its activities here proves that the excellence in logistics and transport infrastructure and the qualification of manpower in São Paulo make all the difference to companies who invests in Brazil, as well as the excellent support from Investe SP, which has precisely the mission of being a partner of companies that choose to operate in our state,” said the governor of São Paulo, Geraldo Alckmin.

In April 2013, the president of Honda Masahiro Takedagawa, visited the governor Geraldo Alckmin to present the company’s project. During the meeting, a Memorandum of Understanding was signed between the company and Investe São Paulo.

“It was a difficult project, but bringing the second plant of Honda to São Paulo shows that we are on the right track. The city of Itirapina will experience a huge development in the coming years. Bringing such a project to a city of 15,000 inhabitants, with IPRS 3 (São Paulo's Social Responsibility Index), which has a low level of wealth, makes us very proud,” said the president of Investe São Paulo, Luciano Almeida.

As with all Honda’s business around the world, the concern about the environmental aspects and impacts will also be a focus of the new unit. The latest technologies will be used in production processes, aiming to reduce the emissions of pollutants. One example is the new water-based paint process which will be adopted so that, with the use of a lower amount of paint, and therefore, lower emission of pollutants, it is possible to obtain the same quality.

For the secretary of Economic Development, Science and Technology of the State, Rodrigo Garcia, in addition to accelerating the local economy and boosting competitiveness, the new plant will also contribute to the sustainable economic development of São Paulo. “The generation of jobs and income associated with environmental awareness is a great advantage of the company,” he adds.

With the new plant, HAB will double its production capacity in the country, from 120,000 (current capacity of the unit in Sumaré) to 240,000 cars per year, from 2015. In addition, aiming to strengthen the development of products that meet the needs and demands of Brazilian and South American consumers, until the end of the year Honda will start the operations of a new R&D Center for Automobiles, in the facilities of the plant in Sumaré.

With the new unit, the accumulated investment in HAB in Brazil, since the beginning of the national production of vehicles, in 1997, will reach approximately R$ 3.5 billion.

Positive moment in Brazil

HAB is going through a great period in the country. After renewing its entire line-up in 2012, the company witnessed its results grow significantly.In the first half of 2013, HAB recorded its best sales result since it began its activities as a manufacturer in the country. In total, 65,127 cars were sold in the period, exceeding the previous historical figure of 61,577 vehicles in 2009. The result represents a 13.2% increase in comparison with the first half of the previous year.

One of the highlights was Honda Civic, a vehicle that has consolidated itself as an undisputed leader in the segment of medium hatchbacks. In January, the company launched the 2014 version of the model with new 2.0 engine and technology without the cold start auxiliary tank, which further boosted sales in the country. From January to July, 26,192 units were sold, corresponding to an increase of 20.5% compared with the first six months of 2012.

Also among the launches presented in 2013, in April, the company started selling the biofuel CR-V, also with the technology without cold start auxiliary tank. The new technology is part of the concept Honda Flex One, which represents Honda’s commitment to innovation in sustainable mobility, combining high performance with low consumption of fuel and emission of pollutants for all generations of products. In July, the new Accord, in the versions EX L4 2.4l and EX V6 3.5l, and Honda City 2014 line, with the new Sport version, arrived at the dealerships.

In 2013, the company also made two other important announcements. Aiming to accelerate the decision-making processes and thereby gain agility and competitiveness, Honda South America (HSA) has decided to concentrate on a single location, in the premises of the factory of Sumaré, in addition to the company’s board, all areas that are part of the business of HAB. Based on the overall concept of ‘one floor’, as used in the Japanese headquarters, the project, which will have an investment of R$ 100 million for the construction of the new unit, includes a greater proximity of the administrative and product development areas with the industrial operation.

In addition, the company also announced the construction of a wind farm in the city of Xangri-lá, in Rio Grande do Sul, which will supply all the energy demand of its first car factory. The initiative, unprecedented among car manufacturers present in the country, will also have an initial investment of R$ 100 million. Honda Energy do Brasil Ltda. was created for the wind farm operation, which will begin operations in September 2014.

About Honda Automóveis do Brasil Ltda. (Unit Sumaré - SP)

Establishment: May 1996Origin of the investment: 100% Honda South America Ltda.Chief executive: Masahiro Takedagawa, PresidentLocation of headquarters: São Paulo, BrazilBusiness: Production and sale of automobilesProducts: Civic, Fit, CityProduction capacity: 120,000 units per yearLand area: 1,7 million square metersNumber of employees: Approximately 3,500 employeesStart of production: October 1997 (Civic)Accumulated production: 1,056 million units (until the end of 2012)Accumulated investment: Approximately R$ 2.5 billion

About the new factory of HAB

Location: City of Itirapina in the state of São Paulo, located approximately 200 km from the capital and 100 km from the other auto plant of the brand, in Sumaré. Land area: 5,8 million square metersProduction capacity: 120,000 units per yearStart of production: 2015Number of employees: Approximately 2,000 employeesInvestment: Approximately R$ 1 billion

About Honda in Brazil

Present in the country since 1971, when it started importing, and then producing motorcycles in Manaus (AM), Honda is currently the largest manufacturer of motorcycles in the country. In 2012, the company achieved the accumulated record of 18 million units produced. In 1992, the company entered the competitive Brazilian automotive market also through imports and, from 1997, through the national production of vehicles in the city of Sumaré (SP). In 2012, the company achieved two important records in the country: in August, it reached the volume of one million vehicles produced in Brazil since the beginning of operations in the plant of Sumaré, and in December, Honda registered the sale of the millionth car in the domestic market since 1992. Since 2001, the company started manufacturing in Brazil three models of stationary engines, in addition to selling generators, motor pumps, brush cutters, lawn mowers and outboard engines imported from other factories of the brand in the world.

About Investe São Paulo

Investe São Paulo is the gateway for companies that intend to settle their operations in the state, besides stimulating the expansion of businesses that are already settled in São Paulo. The agency, associated with the Department of Economic Development, Science and Technology provides strategic information free of charge, helping investors find the best locations for their businesses and facilitating the interaction of companies with public and private entities.

The duties of Investe São Paulo include welcoming foreign delegations, presenting investment opportunities in the state, prospecting new business, providing information to contribute in the development of São Paulo, in addition to promoting the image of the state in Brazil and abroad as a destination of investments. For more information, please visit www.investe.sp.gov.br